EDITOR’S LETTER Sustainable Governance?

Whether you view sustainability in risk management terms or as an overarching philosophy that organisations should subscribe to, it is fast-growing fact of boardroom life. The pressure on directors and management to tread the sustainable development (SD) pathway is as likely to come from shareholders as from the legislators. According to world expert on sustainable development accountancy models, around 30 percent (by volume) of investors in the UK stock market use some sort of ethical screen to review their investments. Add this to pressures from the finance community – UK banks and insurance companies investigate the social and environmental risks of potential customers, growing body of ‘green’ legislation, and increasingly informed consumers, and powerful argument exists for governing using SD criteria.
New Zealand is lagging behind Europe where SD has become mainstream in government policy. The UK has Sustainable Development Commission reviewing government policy and reporting directly to Tony Blair, and the Scottish and Welsh parliaments have SD as policy overriding all others. We have had the RMA since 1991 but there seems to be little appreciation of the breadth of sustainability issues – social, ethical and economic – beyond environmental concerns. Business has taken the initiative with the establishment of the New Zealand Business Council for Sustainable Development (NZBCSD) which sought first to educate business and the wider community and is now moving towards lobbying and policy formation role. The Government has finally come to the party with funding through the Foundation for Research, Science and Technology for six-year research project, launched in July this year, on ‘Building Capacity for Sustainable Development’. The cover story of this issue of The Director covers an address at the project launch by SD accounting expert Jan Bebbington detailing how two threads within business – SD and the pressure for good governance – have begun to weave together to form powerful movement for sustainable governance. Turn to page six for preview of tomorrow’s playing field for directors.
Directors who have attended Waikato University’s Management School will have head start. The school has taken lead in the sustainability stakes. Our governance education feature, pages 21-28, gives an overview of governance courses and programmes offered at New Zealand’s tertiary institutions. Following the high profile corporate collapses around the globe and the subsequent concern over the quality of corporate stewardship and governance, business schools have hastened to add governance programmes to their offerings. For some it means just an additional paper or two, or new content within existing courses. For Massey University, carving out significant niche in this market, it means new school – the Centre for Corporate Institutional Governance (CCIG). It aims to be central focus for studies, research and training in governance and to provide New Zealand governance model. The CCIG together with the raft of offerings from the other universities should address an area formerly neglected in traditional executive education, and ensure that today’s directors have the opportunity to upskill and the next generation will come to the board table better prepared than some of their predecessors.